El Salvador to Eliminate Taxes on Technological Advancements

    El Salvador’s President Nayib Bukele has proposed to remove all taxes on technological advancements, including import duties, property, capital gains taxes, and income. He also stated that he would submit the legislation to the Congress.

    The country’s focus on technological advancement could open up several paths for innovation. However, if centralized entities stifle this growth, it could lead to problems. On March 24, Bukele announced via Twitter that he would present a proposal to the El Salvadoran Congress to eliminate taxes on new hardware and software developments, such as software development, coding, apps, and artificial intelligence.

    The tax exemption will apply to manufacturing hardware for communications and computers as well, as per the president’s statement. El Salvador is known for being pro-Bitcoin, becoming the first country to legalize cryptocurrencies, and establishing Bitcoin as a legal tender in 2021.

    Nonetheless, whether this tax exemption applies to Bitcoin applications is still being determined. In 2023, a bill authorizing the nation’s government to approve a bond backed by Bitcoin is also expected. President Bukele had previously announced his intention to build the world’s first “Bitcoin City” and turn the Central American country into a crypto center.

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